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Tesla’s manufacturing expansion includes the potential construction of enormous chip fabrication plants, known colloquially as "terra factories." Given current constraints on chip supply, Musk explained that Tesla has committed to purchasing all chips produced by leading foundries like TSMC and Samsung.
"The bigger the fab, the faster we get chips, and the more we pay," Musk said. He envisions a fab capable of producing at least 100,000 wafers per month, possibly scaling to a million wafers monthly, which would require a complex of multiple large fabs.
This chip shortage is a bottleneck, impelling Tesla to consider building its own manufacturing capacity to meet the prodigious demands of its AI chips and vehicle production.